Lake Simcoe Cottages

Investment, properties and houses
Welcome to Lake Simcoe Cottages Sign in | Help

Anna Belyntseva

Georgina, Keswick property buy and sell blog

Choose the right mortgage for you

Keswick homes for saleFinding the right mortgage for you is one of the most important steps in buying your home. There are different types of mortgages offered by lenders in Canada. The main ones are Open, Closed and Variable Mortgages.

An “OPEN MORTGAGE” allows the flexibility of prepayment. You can pay part or all of the balance owing without any type of interest penalty.

A “CLOSED MORTGAGE” keeps payments unchanged for the duration of the loan period. It provides payment stability but penalizes a mortgagor who wishes to terminate the mortgage earlier. Each institution will have their own repayment options and policies. Most offer some type of extra pre-payment option that allows you to make extra principal payments to pay off your mortgage faster.

A “VARIABLE RATE MORTGAGE” changes based on the banks prime rate and therefore fluctuates with the market changes. It offers the advantage of lower rates if mortgage rates decline. On the other hand, it exposes the mortgagor to the risk monthly payments will go up if mortgage rates rise.

The life of your mortgage is referred to as the AMORTIZATION PERIOD or term. The most popular terms range between 25 to the maximum of 30 years.

A ”FIXED RATE MORTGAGE” keeps the mortgage rate the same throughout the life of the mortgage even if rates rise. If rates go down, a fixed rate mortgage may prove to be more expensive than a variable rate one. The terms available range from six months to ten years.

A “CONVENTIONAL MORTGAGE” is a loan up to 80% of the appraised value or purchase price of the property, which is less. The remaining amount comes from the borrower’s own resources and is known as the Down Payment. Mortgages that exceed this limit by law must be insured against default, and are referred to as “ High Ratio Mortgages”.

A ”HIGH RATIO MORTGAGE” is used for loans that exceed conventional mortgage lending guidelines. These mortgages are granted under the National Housing Act (NHA) and must, by law, be insured against default through Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada (GENWORTH). The borrower will have to pay the insurance premium, which can range from 0.50% to 3.15% of the total mortgage amount. Typically, the insurance premium is added to the principle amount of the mortgage. With a high ratio mortgage, people can purchase a home with as little as a 5% down payment.


Is available as an enhancement to Mortgage Life Insurance. It is recommended for all mortgagors. It can pay off your mortgage if you are diagnosed with different types of illness (i.e. types of cancer, heart attack, or stroke). Coverage will vary between the different insurance companies that offer this type of insurance with the institutions. 
Published Thursday, March 3, 2011 1:36 PM by Anna Belyntseva

Comment Notification

Subscribe to this post's comments using RSS



rimonabantexcellence site title said:

May 30, 2013 5:07 PM

Ragsdale said:

All activities suggested could possibly be booked through Pyxism Amderica Activities

& Entertainment, plus the historical hotels mentioned is supplied in Pyxism America Hotels.

December 28, 2013 12:27 PM

Cantero said:

*Going Big- As soon as you in addition to anyone has a main phone display, enjoy

being so there (literally) to have an play-by-play found on the motions, keeping replace begin using restroom that will not make use of a

wire, as well as planning unrestricted trips upon the

selling strip without having to pay an income.

June 9, 2014 11:55 PM

Stuart said:

If some one wishes expert view regarding blogging then i suggest him/her to go to see this blog, Keep up the nice work.

November 12, 2014 11:33 AM

German said:

My name is German. I live in Higher Green, United Kingdom.

I randomly stumble on

I just want to say "Hi".

December 27, 2014 5:02 AM

Florian said:

This is when I started out and yes it will be a great start for

you personally as well. No longer did I want stressful situations to influence my health.

So this leads to high calories, low levels of energy, and overeating.

March 11, 2015 2:58 PM

valley national bank mortgage rates said:

This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information. Keep it up. Keep blogging. Looking to reading your next post.

April 22, 2015 5:20 AM

Julianne said:

naturally like your web-site but you have to take a

look at the spelling on several of your posts. Several of them are rife with spelling problems and I in finding it very

bothersome to inform the reality on the other hand I will definitely come again again.

September 14, 2015 4:36 AM

StacyAHasper said:

Awesome! Its in fact awesome article, I have got much clear idea regarding from this paragraph.

September 25, 2016 3:14 AM

Leave a Comment